Inbound Freight Process Streamlining
Inbound Freight Savings
This project was fundamentally about getting two departments (Purchasing and Logistics) to see the entire process and determine how they could work together to save the company money on inbound freight.
- Our first objective was to understand the problem and the opportunity. We developed a problem statement. Download PowerPoint Presentation “Inbound Freight.” The problem statement helped us see the financial opportunity and clearly state the root cause. Note, that this is not a “solution statement”, it doesn’t say what we will do to improve, just what we have to analyze to solve the problem.
- Slide 2 shows how they made progress on increasing backhauls (company trucks shipping purchased product from vendors as they return empty from shipping good to stores), but how this progress was flattening out.
- Next we Process Flow Mapped the current state of the vendor negotiation, inventory ordering and managing freight inbound to the distribution centers. (See slide 3)
- We used the current state as a basis for developing the future state process. If you view the PowerPoint file in slide-show, you will see how we eliminated processes and moved processes so Purchasing and Logistics can work together to save the company money.
- Finally, we created a Control Plan to ensure that this collaboration continues.
This project was a great example of the power of making problems “visible”. Purchasing and Logistics were never able to work through these issues and reduce company freight costs. The problem statement opened up everyone’s eyes to the opportunity. The Process Flow Map showed how the process currently works and made the solution obvious. There were contentious meetings but the end results worked great and had agreement from both departments.